South Dakota Farmers Tour Chinese Port and Soybean Processor
The second day in Guangzhou, the See for Yourself group found themselves busy with travel and meetings. First stop on the agenda, the Nansha Grain and General Cargo Terminal Branch Company (NGT).
Established in 2010, NGT operates six berths discharging 4,000 million metric tons (MMT) of grain an hour. NGT has 32 grain silos on site with 450,000 MMT of storage plus a 150,000 MMT grain warehouse.
Located in the center of the Pearl River Delta and three hours from the open ocean, the average incoming vessels hold 55,000 MMT and takes 1-2 days to unload.
“Visiting the port was the best part of our visit,” said Nicholas Kniffen a Tyndall farmer. “The sheer size, capacity and amount of product entering the port and how it is handled is impressive. The port is an important lifeline of the Pearl River Delta area. The opportunity to see where the action is happening and where South Dakota soybeans are shipped is a sight to see.”
Following the port tour, the group traveled to Dongling Grain and Oil Co., Ltd Headquarters where they received an overview of the company and Chinese agriculture from General Manager, Renault Quach.
Equipped with two production lines for soybean crushing and extraction, Dongling has a daily production capacity of 10,000 tons of soybeans. Dongling is one of the largest edible oil production enterprises in China.
China’s demand of edible oils is around 30,000 mmt. Oil supply from domestic oilseed production does not meet the demand with roughly 10,000 mmt produced. However, China’s edible oils have recently met a surplus due to soaring imports of oilseeds and vegetable oils.
Due to the declining local production of soybeans and expansion of the crushing industry, China has a large deficit of soybeans. Soybean meal consumption is growing at a rate of 13.9% versus supply from domestic soybean production at 5.7% over the past 12 years. Because of the increased demand, exports are needed to fill that demand.
By 2020, 60% of the Chinese population is expected to live in an urban area of the country. Recently, the Chinese Government changed its one-child policy to allow for two children per family. Because of a growing population, meat consumption is expected to increase 1.5% and feed for livestock by 2% by 2020. As the population continues to shift from rural areas to urban areas, and the standard of living improves, a decrease of grain and rice consumption has occurred while meat consumption has increased.
Following the Dongling visit, the group traveled to Hong Kong to spend the last day of the China tour. While in Hong Kong, the group toured the city and had dinner with several key industry leaders.
Guests during dinner included Mr. Li Shengli, who was one of the first in China to import soybeans, oil, and corn into the country in the mid ’90s. Mr. Wu Deyong, who is the head of trade for Cofco in Hong Kong, an $80 billion dollar company that employs 100,000 employees worldwide and Mr. Ringo Tang, who also works for a large company importing all commodities.